FSBM’s external auditor raises material uncertainty

KUALA LUMPUR (April 14): FSBM Holdings Bhd’s external auditor, Moore Stephens Associates PLT, has noted significant uncertainty that could cast significant doubt on the information and technology services provider’s ability to continue in business.

In its report filed with Bursa Malaysia by FSBM, the auditor stated that it was not able to verify by other means the opening balances constituting the statements of financial position for the year ended December 31, 2020 (FY20), FY19 and FY18.

“As opening balances enter into the determination of financial performance and cash flows, we have not been able to obtain sufficient and appropriate audit evidence to determine whether the adjustments made are appropriate in this regard. with respect to the loss for the accounting year presented in the statement of comprehensive income and the net cash provided by operating activities presented in the statement of cash flows,” said Moore Stephens.

The auditor also pointed out that FSBM suffered a net loss of RM9.27 million for FY21 and that the group’s liabilities exceeded its assets by RM5.31 million.

Moore Stephens also said that FSBM’s ability to continue operations was highly dependent on the submission, approval and subsequent implementation of the group’s regularization plan.

He stated that the application of the going concern accounting method is based on the assumption that the group will be able to realize its assets and liquidate its liabilities in the normal course of its activities.

If the accrual plan is not approved, application of the going concern accounting method may be inappropriate, he added.

“Further, as of the date of this report, we have not been able to obtain sufficient appropriate audit evidence to assess the appropriateness of management’s use of the going concern basis of accounting for the group.

“As a result, we have not been able to form an opinion as to whether the use of the going concern assumption in the preparation of the accompanying group financial statements is appropriate,” said the listener.

Shares of FSBM finished one sen or 3.23% higher at 32 sen on Thursday, valuing the company at RM45.22 million.

Shirlene J. Manley